Posts

If you’re an entrepreneur and you plan on getting funding assistance for your business, one option you may consider is a term loan.  In this article, we’ll discuss the basic points about term loans for small businesses. 

Business startup financing

What is a term loan?  Term loans have a fixed length of repayment period, lasting from a year to 20 years or more, depending on the type of loan you obtained.  The amortization or the amount of repayment that the borrower would need to submit includes both the principal and interest of the loan.

Short Term Business Loans

Short term loans mature within a year or less and are ideal for growing businesses that need additional funding in the middle of operations.  There are a number of short term business loans offered by lenders.  Examples are working capital loans, accounts receivable loans, equity, lines of credit, etc.  For instance, if a business needs funds to launch new marketing campaigns, buy more stocks, or hire additional workers, short term business loans provide an easy solution.

Long Term Business Loans

What about long term business loans?  Obviously, this type of term loan takes a longer time to mature and complete.  Long term business loans can have a 10-year, 20-year, to 30-year repayment period depending on the amount of money borrowed.  Long term loans can start from $25,000 to as much as $50,000 or more.

If you are in need of large money to start your business, obtaining a long term loan is the more practical choice.  Usually, term loans require collateral as a guarantee for the loan.  Nevertheless, because long term business loans involve big cash, lenders are more strict and cautious when giving their approval. 

Applicants for long term loans should be prepared to submit all the necessary documentations that the lender requires.  Aside from the collateral, a professional business plan, along with business licensing certificates and accounts spreadsheets are often required to be submitted. 

Your Business Credit History

Whether you’re applying for a short term or long term business loan, the status of your credit plays an important role in getting approved for the loan.  Thus, it is advised to check on your business credit report before submitting your loan application.  Although, there are lenders who grant loans despite bad credit, these loans usually have higher interest rates and fees.  On the opposite, an excellent business credit gives you the advantage of getting lower interest rates and faster approval from lenders.

But what if you haven’t yet established your business credit history?  In this case, your personal credit history would be used by your lender.  Obtain a copy of your credit report to check on your credit score.  Of course, a higher credit score makes you a more qualified candidate for a business loan while a low credit score puts you at a bad light.  If you have a very low credit rating, it is best to work on your credit first before trying to apply for a business loan.

Read more Term Loans for Small Businesses

Resources for Small Business Loans, Start up Business Financing and Startup Business Loans

Managing a business is certainly not easy, particularly during times when the economy is in a slump.  Some small businesses have been forced to shut down operations due to the lack of funds.  Aside from day to day expenses, the company may have other obligations to creditors such as loans, leases, etc.  Sometimes, mismanagement can be a cause of turmoil for a company. But instead of giving up the business, do you still have other options?

In this article, let’s talk about a business financing option known as CVA or Company Voluntary Arrangement.  What is it and how can it help business owners solve their financial problem? 

The Basics of CVA

A Company Voluntary Arrangement is an agreement between administrators of a company and creditors.  Under the CVA, creditors agree to get paid at a later time, giving the business a chance to recover.  Payments to creditors will be taken from the future profits that the business will gain.  In the meantime, the business can use its existing funds for more important costs to save the company from closing down.

In order for a CVA arrangement to be successful, an entrepreneur must be sure that he/she can still keep the business profitable when financial help has become available.  Otherwise, repayment can become a problem.  If you see that all you need is additional funding to keep the business from going bust, then get in touch with a professional CVA personnel.

When applying for a CVA arrangement, a team of business professionals will evaluate the status of your business, paying special attention to its finances.  Once approved, the application process can be started.

First, a proposal must be submitted to the State Court to prevent any creditor or lessor from taking action against the company or its property for up to 28 days.  Afterwards, the proposal be sent to the appropriate creditors.  You need to get at least 75% affirmative votes from the group of creditors. 

Once the Company Voluntary Arrangement votes have been casted, the business’s liability to its creditors is temporarily cleared.  Next, the repayment terms will be set.  As The business or company who applied for CVA is expected to pay the creditors at a designated date within the agreed time period.

Company Voluntary Arrangement and Your Business

Banks, creditors and the government is inclined to give financial support for businesses that need to be rescued from the risk of failure.  If you want to avoid insolvency or liquidation, it is an option that can save you time and money.  It is also a confidential arrangement so there is no need to worry about damaging the reputation of your business or getting negative publicity.

Bear in mind that in order to work, the administrators or directors of the company must be willing to work hard for the recovery of the business.  The management of the business has to be evaluated to know if a restructuring or changes in strategy must be done.  To fully understand the terms of a Company Voluntary Arrangement, it is best to seek assistance from an attorney specializing in business. 

Read more Company Voluntary Arrangement - The Answer To Business Financing?

Resources for New Business Financing and Start up Business Financing

When starting with a new endeavor, ample planning and preparation are two crucial steps that must never be neglected.  The same principle applies in business.  If you have a plan of venturing into business, you should make sure that you are ready-  physically, emotionally, mentally and financially. 

In this article, let’s focus on the financial aspect of the business.  Are you financially prepared to take on the financial responsibilities of a business owner?  Do you have sufficient budget or start up capital?  Do you need additional funding assistance?  If so, where can you get the financial help that you need to start your business?

Acquiring Business Start Up Financing

Banks and financial institutions provide a number of financial aids that are especially created for new businesses.  Business credit cards can be used to purchase equipment and machinery in advance without the need to pay for cash.  However, business credit cards usually comes with high rates of interest so you run the risk of getting stuck in debt if you fail to keep up with your monthly credit card payments.

Business loans or new business loans are an ideal resource for your business start up needs such as buying office equipment, machinery, office space, etc.  Depending on your credit status, you can choose to get a secured business loan or an unsecured business loan.

Secured new business loans are obtained by submitting a collateral.  If you have a property that you can use as security, you can apply for a secured business loan and get approved right away.  Even if you don’t have an excellent credit, you can still qualify for a secured new business loan.  Furthermore, an unsecured loan generally offers lower interest rates than an unsecured loan because it comes with a collateral. 

Aside from the collateral, your lending company would also require you to submit your business plan to determine your business’s potential and financial capability.  If you’ve already established the business, you would also need to submit other documents such as your financial statements and tax returns.

Acquiring a new business loan is fairly easy but you’ll want to make sure that you’ll be borrowing money from a legitimate and reputable lending company.  Take the time to research about the lending company’s background and reputation.  More importantly, carefully examine the terms and conditions of your loan before signing up your contract.

Remember that a secured business loan is supported by the property you’ve submitted.  Failing to keep up with your loan payments or defaulting on your loan will cause you to lose your property to your lender.  Avoid the risk of repossession by submitting your payments on time all through out your loan’s term.  In case you encounter problems and you wouldn’t be able to submit your payment on time, get in touch with your lender right away.  Explain your current situation and ask for your payment due date to be extended.  By giving an advance notice, most lenders would be willing to give you a 30-day extension to submit your payment for the month without reporting it as a late payment.

Read more Get Into Business With a New Business Loan

Resources for New Business Loan, startup business loan and small business loan

It is not uncommon for both new and old businesses to face to dilemma of cash flow shortage.  True enough, not having sufficient business funds to utilize can endanger a business and lead to failure.  Some business owners were forced to shut down operations or close the enterprise due to lack of available funds.  Luckily, businesses have the option of obtaining business loans to sustain their business needs.

Some new business owners jumped into their business ventures without carefully considering their finances.  As a result, unstable financial resources forced some new entrepreneurs to prematurely close down their businesses.  Clearly, a solid financial resource is an essential to the success of a business.

New entrepreneurs must know that they may need to wait a couple of months before they can enjoy their profits  This is why depending on your personal savings alone may be risky.  Without funds to utilize for the production or marketing of your business, you may soon find struggling for survival.  On the contrary, acquiring a business loan gives you an assurance that you have the financial support you need at an time.

How can you increase your chances of getting approved for a business loan?  A proficient business plan is crucial to the approval of your business loan.  Therefore, it is advised that businesses prepare their business plans before submitting an application.  A proficient business plan should contain complete details about your business including the basic accounting information of your business.  Aside from the business plan, local State registrations and licensing documentations would also be required by your lender.

What if you got turned down by a business loan lender?  In case your business loan application is rejected, you can ask assistance from the Small Business Administration (SBA).  Although the SBA does not provide direct financial assistance to businesses, they do provide support for businesses who need advice and help in obtaining a business loan.  The SBA gets in touch with private loan lenders and commercial loan lenders that offer business loans or start-up loans.  With the back-up from the SBA you surely increase your chances of getting your loan approved.  However, always remember that you need to have previously applied for a commercial loan and got denied by a lender before you can apply for an SBA loan.

There are a variety of business loans offered by lenders.  Examples are commercial business loans, business equipment loans, secured business loans, unsecured business loans, accounts receivables factoring loans, cash advance loans, etc.  These business loans may either be long term or short term depending on your needs.

Regardless of what type of business loan you plan to obtain, it’s important to do your choosing wisely.  Before signing up your business loan application, be sure that you clearly understand the terms and conditions of your lender.  Take note that different lenders offer different rates and terms when it comes to business loans.  Of course, you want to choose a lender that is legal and reputable and one that offers a low interest rate, flexible repayment terms, and reasonable conditions. 

Read More The Importance of a Sufficient Working Capital in Business

Resources for startup business loans, unsecured business start up loan, new business loans

Time and again, we all experience the need for financial assistance either from a relative, a friend or a lender.  You may need the money to send your kids to college, renovate your home, or to help you start a business.  Regardless of what your purpose is, there is a loan that suits your exact needs.

In this article, we’ll be discussing about a particular type of loan that is especially suited for business owners and new entrepreneurs- the finance loan.  What is loan financing and how does it work?  Why should you be interested to know about it?  If you’re planning on starting your own business, how can a finance loan help you?

Secured Finance Small Business Loans

Finance loans are actually secured loans that are ideal for small businesses.  Why?  With this type of loan, the collateral used is actually the item that you’ve purchased using the same loan.  For example, if you’ve bought a new equipment with your loan, this equipment will be used as a guarantee for your loan at the same time.  This means, you failed to keep up with your payments, your lender has the right to take the equipment, resell it and use the money as payment for your debts.  This way, your lender is protected against defaults of payment.  After you’ve completed your payments throughout your loan’s term, then you’ll get the full ownership of the equipment. 

Do you need to submit other collateral aside from the item you’ve purchased?  The answer is no.  The item you’ve purchased with the loan itself is used as the guarantee for your debts.  This means, you don’t have to put your home property on the line or use your own existing property just to get a finance loan.

Comparing Loan Rates and Fees

Generally, small business finance loans are used to cover for large or expensive purchases such as special business equipment, machineries, or vehicles.  Take note that within your loan’s term, you would also pay the interest of the amount you’ve borrowed.  Thus, it is wise to compare different finance loan companies first before submitting your application.  Make sure that you clearly understand the rates, costs and terms of the lender.

Another important advice is not to focus on the interest rates alone, when comparing possible lenders.  Some lending companies may offer attractively low rates, but what about the rest of fees and charges?  Would you have to pay for unreasonable processing fees and miscellaneous costs on your loan?  To compare lenders efficiently, you need to weigh all the factors that are involved in your loan.

After doing your research, you may be ready to apply for a finance loan.  Application is typically done online so it’s really convenient.  You can often expect a response from the lending company within the same day of submitting your application.  It is wise therefore to take your time in studying what each finance loan lender has to offer.  Also, make sure that a finance loan is really the best option for your current financial need.

Read more Applying for The Right Small Business Loan

Resources for startup business loans and start up business financing

In today’s world, an individual’s personal credit can play a big role in life.  Finding a stable employment, getting approved for a loan easily, being qualified to the best credit cards in the market, and having the power to negotiate with lenders- these are the privileges that a person with excellent credit can enjoy.  The same thing goes for business owners.  An excellent business credit gives an entrepreneur the power to ask for easy approval and better rates from business loan lenders.

On the contrary, bad credit or low credit scores often have to settle with business loans and business credit cards that have higher interest rates, lower credit lines, and fewer privileges.  Getting approved for a business loan can prove to be difficult since most lenders prefer to grant new business accounts only to those with good to excellent credit history.

With this in mind, every business owner must be concerned about the status of his or her personal credit history or business credit history.  If you currently have bad credit, what can you do to improve your situation?  What steps can you take in order to rebuild your credit reputation?  The good news is, you don’t have to suffer with bad credit forever.  Yes, it is possible to regain good credit history and keep it in good or ever excellent standing.  How?

What Are Secured Bad Credit or Poor Credit Business Loans

Secured business loans, also called poor credit business loans can be tools to repairing your poor credit history.  Lenders who offer secured business loans would require collateral as a guarantee for the loan.  Typically, the amount of loan or capital that can be borrowed depends on the value of the collateral to be submitted.  Obviously, the higher the value of your property or asset that you would submit to secure your loan, the greater the amount of your business loan would be.  In case of a default, your lender would automatically repossess your property as payment for your unpaid debts.

Bad credit business loans have higher interest rates compared to regular business loans but if you do your research well, you should be able to find a lender who offers reasonable rates and terms.  What’s great about a secured business loan is that your loan application can be quickly approved despite your poor credit history.

As soon as your secured business loan has been granted, you now have the opportunity to start rebuilding your credit.  Make it a point to submit your monthly loan payments to your lender on time.  Never miss or delay even a single payment on your loan.  Be consistently aware of your deadline of payments.  As much as possible, pay your monthly loan before your due date and don’t wait until the last day of payment arrives.

To avoid incurring new debts, use your business loan wisely.  If in case there are times when you can’t submit your payments on your due date, call your lender immediately.  Inform them about your situation and ask for a grace period.   Usually, a lender would give you up to 30 days to submit your payment without reporting it to the credit bureaus as late payment.  If you keep in touch with your lender at once, they’ll be more willing to give you the consideration you need.

By keeping up with your monthly business loan payments, you should be able to seen an improvement in your business credit after only a few months.  Within a year, you may have upgraded your credit score from bad to good.  Strive to make it better by staying true to your payment obligations.  In time, you should be able to enjoy what other business owners with excellent credit enjoy – better deals from lenders.

Read more On Getting Secured Business Loans

Resources for startup loan, new business loans, startup business credit

If you have a dream of starting up your own business, what steps have you already taken to make that dream come true?  Do you have a brilliant idea for a business?  Have you made enough savings to bring those business ideas to life?   Or are you hindered by insufficient funds to start up a business? 

If that is your situation, don’t feel helpless.  It is possible to start up a business even if you have limited funds.   With the help of business startup loans, you can already put those brilliant ideas to work and accept the challenge of being a new entrepreneur.  In this article, let’s discuss more about business loans and how they can help you.

About Small Business Start Up Loans

There are two basic types of startup Loans and these are secured small business startup loans and unsecured small business startup loans.  Most borrowers prefer to apply for a secured start up loan because they have lower interest rates compared to an unsecured loan.  Obviously, you would need to submit a security or collateral when you apply for a secured loan.  Any type of personal property can be used as collateral such as vehicles, jewelry, lots, bank savings, and homes.  The amount of loan you can borrow would depend on the value of the collateral you submitted.  In most cases, the home is used as collateral for loans because it has the most value.

On the other hand, unsecured business loans do not require any form of collateral to be submitted.  But as expected, unsecured business loans do come with higher interest rates and fees.  Understandably, lenders would also want to make sure that they can get back and earn from the money they lend.  In addition, unsecured business loan lenders usually require good to excellent credit to approve an application.

Business loans have different payment terms.  The range may start from as short as five years to as long as 25 years or more, depending on the lending company.  For business owners with excellent credit, they can usually negotiate and ask for lower interest rates from their prospective lender. 

Required Documentations for Small Business Loans

What particular documentations are needed to be submitted when applying for a start up business loan?  Lenders often require that a business plan be submitted so that they can see the strengths of the business.  In your business plan, the type of business you have, the type of ownership, basic financial details and other important information about your business is included.

You would also be expected to submit your loan request document which should explain in detail, the amount of loan you want to borrow, the repayment term you prefer, and other requests you may have regarding your business loan.

Other documentations you’ll need to prepare are your licenses and registration certificates for your business, your past balance sheets and taxes (if you’ve already started the business) and other documents that support your loan application. Preparing these documents and completing them will ensure a faster processing and approval of your business loan.

Read more How Startup Loans Can Fulfill Your Dream of Owning a Business

Resources for Startup Loan, Start up business loans, and unsecured business start up loan

Whether you’re starting up a business or in the process of expanding the business, funding can be a challenge. Applying for a business loan can take time and you may not want to wait too long. Therefore, why not consider equipment lease financing?

For many successful businesses, equipment leasing has greatly helped them in getting the financial assistance they need. Is it really wise to lease equipment? To answer this question objectively, perhaps it’s best to take a look at the advantages that leasing equipment offers for a business:

Equipment leasing frees up your cash flow.

Equipment leasing does not require a down payment. An equipment lease allows a business to pay for the equipment in monthly installments so there’s no need to put in huge amount of money just to get the needed equipment.

If you want, you can also apply for a lease term that enables you to submit your payments on a yearly basis. Thus, you can use your existing finances to support different functions of your business such as the production, manpower or marketing campaigns.

Equipment leasing gives easy approval.

Compared with obtaining a business loan from banks, equipment leasing isn’t too complicated. Most equipment leasing companies will only consider the last six months of your credit history. In addition, leasing firms will require a business plan to be submitted and a list of the equipment you wish to obtain.

Preparing the necessary documents in advance would help speed up the processing of your equipment lease application. Once you have submitted the necessary documents along with your leasing application, you can expect to get immediate approval and get the devices or machineries you ordered right away.

Equipment leasing lets you use state-of-the-art equipment.

Purchasing the latest equipment in the market can be really expensive. As a starting business or as a growing business, you may have a hard time getting sufficient budget to buy these machines especially if you need a lot of equipment.

Nevertheless, leasing gives business owners a one-of-a-kind opportunity. Yes, through equipment leasing, you can choose the latest equipment in the market without breaking your budget.

Equipment leasing protects you from obsolescence.

Devices are constantly modified and better versions are introduced in the market almost on a yearly basis. Purchasing equipment doesn’t give you the leeway to change old or obsolete equipment as easily. By leasing business equipment, you can choose to replace your leased equipment for newer models in the market.

Using only the latest in technology will surely give your business the productivity and the edge over your competitors. To avail of this option, make sure that a "modern equipment substitution clause" is included in your lease term.

Equipment leasing gives an entrepreneur special tax benefits.

Leasing payments are considered as monthly expenses or operating costs, not debt. Thus, it is possible to write them off from your taxes. However, to be sure, it is best to consult matters about filing taxes with a business lawyer or with a certified public accountant.

Read more Small Business Equipment Leasing, is it a wise choice?

Resources for Business Equipment Leasing, Equipment Leasing for Startup Buisness and start up business

We often hear that in order to succeed in a business, planning and preparation are needed.  Many people have rushed-in into opening up a business only to find that they weren’t prepared for the challenges.  Sadly, most of them who opened a business unprepared were forced to close shortly.

If you have plans on venturing into your business, don’t overlook the necessity of planning and preparation.  Let’s discuss the main things you should consider in advance when starting up a business.

Commitment, Discipline and Determination

Starting up your own business will demand lots of your time and energy particularly on the early stage of the business.  If you were used to working eight hours, going home, and leaving all your tasks in the office as an employee, things will be a lot different running your own business.

You would be facing loads of tasks in your hands, and lots of responsibilities and decision-making on your shoulders.  Yes, you can work in your phase and at your own time, but if you don’t have a work schedule to follow, or if you’re not following the schedules you’ve set, your business will be in trouble.  Thus, self-discipline, commitment, and determination are qualities that you must have and you must nurture if you want to succeed in a business.

Knowledge About the Business

Being knowledgeable in running a business and in the specific type of business you wish to start on is very important.  Most people who overlooked this factor have failed with their business.  For instance, you need to have at least a basic knowledge in accounting to be able to manage more effectively.  You need to know the basics about working with a computer to handle your tasks more quickly and easily.  If you wish to start an online business, then you should know at least the basics about how internet marketing is done.

If you think you lack the skills and knowledge on these things, it’s about time to start learning about it before you even start the business.

Understanding and learning about business management is essential to be able to make the right decisions for the business.  Furthermore, managing a business involves different areas such as marketing, production, accounting, human resources, finance, and others.  Even if you will be hiring employees to perform these tasks, you still need to have at least the basic understanding about these functions in order to manage your people and the business effectively.

Start up Financing

Do you have sufficient funds to start up the business?  This is a question you have to seriously consider.  If you have your own resources to fund the business, it is still possible to get help from other sources.  Nevertheless, you have to be very careful and certain when trying to obtain funds for your business.

Possible options to obtain start-up financing would be to borrow from friends or relatives, get a loan from banks or lending institutions, seeking angel investors, applying for a business equipment leasing or seek a government grant.  Whatever you decide, see to it that you’ve made extensive research about each financial source before choosing the one you feel is best.  Make sure that you’re dealing with a legitimate and trusted company and lastly, see to it that a lawyer has checked that all agreements written in the contract are legal and true before it is signed by all parties involved.

.

Read more Business Start Up and What You Need

Resources for Start up business, start up business financing and business equipment leasing

When starting up a business, small business entrepreneurs usually seek out business loans to obtain the funds they need.  However, not all banks cater to all types of businesses.  For instance, larger banks may not be as acceptable with small businesses as smaller banks would.  In most cases, larger banks prefer clients from larger firms or established businesses rather than small enterprises.

If you have a small business, it would be recommended to apply for a loan from your local bank as it is more likely to grant approval.  In addition, smaller banks are much more accommodating to small business entrepreneurs, giving them the personal attention they need. 

Now let’s discuss the major factors that a bank considers when reviewing small business loan applications:

Credit History.  Any lender makes the decision to approve a loan or not based upon the individual’s credit history. Needless to say, those who have a high credit score can expect to get a loan approval more easily than those who have less-than-perfect credit. 

In fact, people who have low credit scores are at risk of getting rejected and may have to settle for sub-prime loans.  For this reason, a business owner is advised to check his/her personal credit history first before submitting a loan application.  Thus, if he/she finds that his/her credit score is low or unimpressive, the necessary steps can be done to boost the rating.

Capability to pay.  A bank also considers the business owner’s capability to make repayments.  This is why banks require business loan applicants to submit their

financial statements for at least the past two years to make sure that the business can produce sufficient cash flow and keep up with loan repayments at the same time.

Working capital.  This is the amount of money you intend to borrow.  Is it within a reasonable range?  Asking for an amount that is larger than your capacity as a business would will most likely result to a rejection.  Thus, consider carefully about exactly how much money you can afford to loan before submitting your application.

Loan Security.  Lenders love borrowers who have properties that can be submitted as a security for their loan.  Properties could be a home or a lot which can be used as collateral.  If you have assets in your account, you can expect that the bank will approve your application.

Your reputation.  Aside from your credit score, the lender will also measure you credit worthiness based upon your reputation. This is especially true from small businesses seeking a business loan.  Expect that the bank will be conducting a background check on your business’s reputation as well as your personal reputation as an entrepreneur.

Reason for loan.  A lender will also consider your purpose in obtaining a loan.  What would you do with the money you wish to loan?  Are you going to use it as working capital to start up a business or for expansion?  Whatever your reason is, your lender would consider if it counts as a sensible reason for getting loan.

Read More How to Obtain Business Loan from a Bank

Resources for Start up business loans and new business loans.